Southeast Lodging Properties Post Slight Improvement for the Winter

DENVER, Colo., Dec. 12, 2019—At the halfway mark of the Southeast region’s winter season that stretches from September through February, a robust increase in bookings made during November point to stronger results for the second half of the season. According to the DestiMetrics* Market Briefing by Inntopia, the resurgence in occupancy for the final three months of the winter will help offset the negative impact of the sluggish figures posted during September and October. The monthly report includes data collected through Nov. 30 and is aggregated among all properties.

Actual occupancy in participating lodging properties dropped four percent in November compared to November 2018, while the Average Daily Rate (ADR) was up a healthy 5.1 percent. Taken together, aggregated revenues for the month were up one percent in a year-over-year comparison.

Looking forward, the seasonal rebound appeared in November’s booking pace. Although winter occupancy is down 2.3 percent as of Nov. 30, it signals a considerable recovery from the Sept. 30 report when occupancy was down 11 percent. Bookings made in November for arrivals in November through April are up three percent compared to last year at this time. Four of the six winter months showed a dramatic recovery—most notably January arrivals surging up 28 percent over last year at this time, and February reporting a whopping 84.7 increase in November bookings for February arrivals.

“The reality is that early occupancy losses in September and October are continuing to drag down overall lodging performance for this winter, and part of that can be attributed to growing consumer pushback against rising rates across the destination travel industry,” said Tom Foley, senior vice president for Business Operations and Analytics for Inntopia. “But strong bookings in November for arrival in the high-value month of December and high-volume month of February are pointing to a turnaround in the overall season if the current momentum can be maintained.”

The monthly Briefing also tracks economic indicators and analyzes their impact on consumer travel decisions. In November, the Dow Jones Industrial Average (DJIA) rose a sharp 3.15 percent to post the highest monthly close on record–just short of the single highest daily close set on Nov. 26 this year. As of Nov. 30, the DJIA is 10.8 percent higher than one year ago at the same time, but the dramatic increase reflects the November 2019 gains in contrast to the sharp declines in the Index in November 2018.

Despite the record-setting stock market highs, the Consumer Confidence Index declined for the fourth consecutive month in November to finish at 125.5 points. Although the dip was a scant 0.5 percent from October, it is now 10.3 points below its most recent high of 135.8 points in July 2019. Another positive economic indicator was the national Unemployment Rate dropping from 3.6 to 3.5 percent in November. Employers exceeded analysts’ expectation with the addition of 266,000 new jobs (which does include the 41,000 General Motors workers returning to their positions following an extended strike) and well ahead of the 187,000 expected. The strong job market report was further bolstered when coupled with adjusted figures for September, up 13,000, as well as for October, adjusted up 28,000.

Highlighted in this month’s Briefing was a comparison to last year’s post-Hurricane Michael circumstances and the number of available units for rent last winter compared to this winter. The report confirmed that this winter’s under-performance compared to last winter is more strongly associated with consumer resistance to rising rates and not to the number of available units. The difference of available units for rent varied by less than 0.2 percent in a year-over-year comparison, indicating that declining occupancy cannot be attributed to inventory changes.

“Unusual lodging trends throughout the Southeast region have persisted for the fourth consecutive month with declining year-over-year occupancy and flat room rates,” Foley acknowledged. “There is no question that occupancy has struggled so far this winter compared to last year, but what we are seeing based on November’s lively booking pace is that a significant rebound for January and February is now on the books and will help even out the aggregated winter results. That said, consumers are continuing to show resistance to climbing rates and lodging properties throughout the Southeast region will have to manage that delicate balance to maintain stability between occupancy and rates,” he concluded.

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*DestiMetrics, part of the Business Intelligence platform for Stowe-based Inntopia, tracks resort performance in selected mountain and southeast U.S. destinations. They compile forward-looking reservation data each month and provide individualized and aggregated results to subscribers at participating resorts. Data from the Southeast is derived from nine resort destinations in five states including South Carolina, Virginia, Georgia, Florida, and Alabama.